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Friday, June 19, 2015

Food/beverage scale-up references?

A frequent correspondent writes in:

Hey CJ,

I'm in the unusual situation of helping a friend start up their own soda company.

I'm being brought in right at the transition from a basic home operation to scale up in larger than garage scale operation. Given that this is a big transition for me from academic research, I was hoping that you or your readers might have suggestions for books/readings on food and beverage chemistry where it pertains to scale, etc. Also, any readings that people would recommend for governmental oversight, etc. would be helpful.

We want to get this right.

Thanks,[MB]

My suggestion is to go to your local ag school, talk to some food science professors. Other than that, no idea. Readers?

12 comments:

I would try to find a local craft brewery to chat with. Since making soda and brewing beer share a fair amount of equipment and techniques (flavor extraction, process engineering, water chemistry, carbonation, bottling, etc.), they will have gone through a lot of the same scale-up problems. They will also know about some of the regulatory hurdles regarding beverage production, though some of them will not apply to non-alcoholic drinks. In my experience, craft brewers are friendly people that like to help other businesses (even their competitors sometimes).

I also second the idea of talking to your local ag school. Anywhere with a brewing, wine making, or food science program will probably someone with experience in industry scale food and beverage processing.

If you need an approachable food sci prof, look up John Coupland (@JohnNCoupland) - he's at Penn State and is both very knowledgeable and articulate, at least from his web presence and portions of his textbook that I can access online.

At the risk of being completely obvious, http://www.fda.gov/Food/default.htm has the current regulations for GMP and a large body of regulatory guidance that should help you make intelligent choices in the absence of more direct rules. It's no substitute for someone who knows the industry giving personalized advice, but it does also have contact information for people in College Park who are paid to answer questions about what the rules say.

I am not sure which Code of Federal Regulations (CFR) covers carbonated beverages. If you live close to an university with a food science program, it may be prudent to inquire if they have expedited certificate-granting programs (e.g., online or week-long short courses) for food or beverage process management. Because you will be manufacturing a regulated commodity, you may consider partnering with an established manufacturer who can do private labeling. Major advantages offered by an established manufacturer include technical and regulatory infrastructure (QC and QA), so that you do not have to oversee water testing, raw material validation, personnel training documentation, etc. A university food science department would likely have a list of regional and national commercialization partners. The soda formulation may be considered a trade secret or intellectual property.

One is the Institute of Food Technologists - there are lots of affiliated people who work in soda and beverages and even some ways to contact them even if you're not a member - https://www.ift.org/

The second is - there are two relevant movies:"One, Two, Three" (1961) - James Cagney plays against type as a mid-level Coke exec posted to Germany in this Billy Wilder-directed comedy. Some of the comedy is dated (actually, the whole premise is only for those who remember the Cold War) and a bit flat, but the "Sabre Dance" restaurant scene and the hilarious "torture" scene make up for this. "Kapellmeister! More rock und roll!""The Coca-Cola Kid" (1985) - A somewhat strange comedy about a Coca-Cola "troubleshooter" (Eric Roberts) sent to Australia to improve market share. Wry commentary on American vs. Australian ideals and attitudes towards one another, sweetened by the presence of young Greta Scacchi. I think it's based on a couple of short stories by Frank Moorhouse (Australian writer).

...and a belated addendum - "I would think that one of the bigger challenges to scaling up would be dealing with sourcing bottles and bottling equipment." - I seem to remember that Coke gets around this, sort of, by establishing long-term relationships with existing bottling companies/distributors in each of the markets they're in.

Looking up the FDA stuff is all good. I wouldn't forget about the local/town health inspectors, either. Most of the time they do appreciate heads up about a new business. After a good conversation they would be less likely to put up resistance to licensing.

(Generally speaking the number of employees that starts OSHA compliance is ten)

You will have a plethora of business law requirements depending on your tax structure (i.e. Worker's Compensation, business taxation, insurance requirements) - Get an accountant.

I recommend either incorporating or forming an LLC (you must decide what is best for you): I would start here at nolo.com: http://www.nolo.com/legal-encyclopedia/llc-corporations-partnerships.

Also, get their tax books for business: http://www.nolo.com/legal-encyclopedia/taxes

Ready to set up your LLC or corporation? Legal Zoom: http://www.legalzoom.com/ (About 20% of what a lawyer would charge) - and don't forget about "foreign corporations" if you're incorporated in one state and operate in another.

I presume that you're going to generate waste. That will make you subject to RCRA regulations if it is "hazardous waste" Start with this primer:

http://www.epa.gov/osw/inforesources/pubs/orientat/ (You can download the entire manual from this location)

Looking for E&O or General Liability insurance? If you're an ACS member, go here: http://www.acs.org/content/acs/en/membership-and-networks/insurance.html

Hook up with SCORE (Service Corps of Retired Executives) if you can. When I was setting up Midwest Chemical Safety, I found them to be generally unhelpful but I think it was because they didn't have a lot of experience with "consulting" or "consultants" and especially no experience in occupational safety. But, "no education of any kind is ever wasted."

Also - one word of advice from someone who left a 6-figure job to do it on his own and has not looked back: Stockpile a MINIMUM of 2 years worth of expenses IN CASH before you pull the trigger on the day job. That comes in infinitely handy when things like your wife's transmission pukes itself on the side of the road.